TSMC chairman and chief executive Morris Chang (張忠謀) had anticipated a better-than-expected first quarter as handset manufacturers replenished inventory earlier than usual to cope with product launches in the first half.

Lu reiterated his “buy” rating on TSMC, citing technological leadership and potential growth from Apple Inc’s new processor orders, according to a report released on Monday. He also said that concern about growing competition from Intel Corp was overblown, following Intel’s recent progress in winning orders from TSMC’s long-term client Altera.

For this quarter, Lu predicted that TSMC would increase revenue by 7 percent. He maintained his target price of NT$115 for TSMC, implying an about 17 percent increase from the closing price of NT$98.3 yesterday.

Local rival United Microelectronics Corp (UMC, 聯電) yesterday reported its best monthly revenue for last month and better-than-expected quarterly revenue.

Revenue grew 9.97 percent to NT$8.6 billion last month from NT$8.73 billion in February. On an annual basis, it marked growth of 6.86 percent.

Last quarter, revenue grew 6.48 percent sequentially to NT$27.78 billion, from NT$26.09 billion in the final quarter of last year.

UMC had expected revenue to be flat last quarter compared with the fourth quarter, because it predicted that a 6 percent decline in average selling prices would offset a 6 percent quarterly expansion in shipments.

Separately, MStar Semiconductor Inc (晨星), the world’s biggest supplier of chips used in LCD TVs, yesterday said revenue climbed 14.5 percent last month to NT$2.74 billion, from NT$2.39 billion in February. That represented an annual decline of 19.7 percent.

MStar said revenue last quarter contracted 17.9 percent to NT$7.85 billion, compared with the fourth quarter’s NT$9.51 billion. That was a reduction of 12.5 percent from a year earlier.

MStar is expected to become a full subsidiary of local handset chip designer MediaTek Inc (聯發科) in August, after China’s competition watchdog approves the deal.